When the largest employer in Suwannee County, Pilgrim’s Pride, announced it would lay off more than a third of its workforce in February, the local community reeled. But the 505 jobs lost are just part of the impact the company’s economic struggles are having on the region.

The Garcias had a contract to supply chickens to Pilgrim’s Pride through 2012. They and nine other local farms have asked the bankruptcy judge to force the company to honor the contracts. [Photo: Jeffrey Camp]

Texas-based Pilgrim’s Pride is the largest chicken processor in the nation. All of its Florida operations are in Suwannee County. The company filed for Chapter 11 bankruptcy protection in December after losing nearly $1 billion in 2008 — the worst loss in its 63-year history. During that time, says Suwannee County Commissioner Wesley Wainwright, also a chicken farmer who supplies Pilgrim’s, the company curtailed production so much that all local contract growers suffered about a 25% revenue decline from the previous year.

Now, as part of its reorganization, Pilgrim has canceled more than two dozen contracts with chicken farmers in Suwannee and surrounding counties. “We’ll definitely lose the farm. We’ll lose everything,” says Gillian Garcia, who with her husband, Bruno Garcia, has a $1-million mortgage on eight chicken houses that solely supplied Pilgrim’s.

The company says it has been hurt by record feed costs, an oversupply of chicken and softening demand.

Live Oak Mayor Sonny Nobles says the company has refused to pay a $76,000 utility bill. The bankruptcy judge made the company put up a guarantee to cover future bills, “but we’ll basically have to eat the $76,000, and for our budget in these economic times, it’s quite a blow to us.”

“It’s looking real grim,” says Wainwright. “For the workforce dumped on the market, there’s no other industry that can pick them up.”